Federal R&D spending is in jeopardy

The federal Small Business Innovation Research conference is coming to Wisconsin in April. Don’t be shocked if it’s one of the last to be held – anywhere.

Like many other research and development programs funded by the federal government, the 30-year-old SBIR grant program faces an uncertain future. Federal budget deficits and skeptical attitudes about the value of investments in science, from the space program to energy to climate change studies, have put R&D spending under a budget-cutting microscope in Congress.

Even though programs such as SBIR and the related Small Business Technology Transfer grants have proven their worth over time in terms of launching private businesses, it’s uncertain when they will be renewed by Congress and at what spending levels.

Between October 2003 and March 2010, according to figures kept by the Wisconsin Technology Council, 134 Wisconsin companies won SBIR grants worth a total of $190 million. While critics say some R&D companies live on the grants year after year and never really grow, most companies use them as early seed money and attract hundreds of times more in private investment dollars. Those investment dollars, in turn, create well-paying jobs.

Those kinds of stories, as well as hands-on advice from researchers, federal experts and others, will be featured at the federal SBIR spring conference, to be held April 10-13 at Madison’s Monona Terrace Convention Center. The event will be followed by a special Biofuels Showcase on April 14, also in Madison.

Eleven different federal agencies make highly competitive grants to researchers whose small businesses are helping push innovations closer to the marketplace. In Wisconsin, the federal agencies most active in making SBIR grants are the National Institutes of Health, the Department of Defense and its various branches, the Department of Agriculture, the Department of Energy and the National Science Foundation.

Reauthorization of the SBIR program has been delayed for more than two years, in part because of policy differences between the U.S. Senate and the House of Representatives, but lately due mostly to budget pressures. That’s not unlike what is facing other science programs in the federal budget.

With the federal budget deficit projected a $1.5 trillion this year, some members of Congress are taking no prisoners when it comes to cuts – especially in “discretionary” spending programs such as scientific research. Washington’s total investment in scientific research isn’t large compared to other parts of the budget, but the feds fund more than one-third of all R&D spending nationwide. That represented $398 billion in public and private spending in 2008, according to NSF. Of that total, about $30 billion is spent on “basic” research, the kind of unfettered inquiry that can lead to game-changing technologies.

Some members of Congress say cuts to the federal science budget are long overdue, calling some programs wasteful or politically motivated. Other critics suggest it’s time to go back to an era when private businesses funded most R&D breakthroughs.

Science proponents say the United States will be eating its seed corn if it slashes spending on science. They believe federal investments in R&D over time have not only sped life-saving inventions to the market, but created millions of jobs, spawned hundreds of thousands of companies and helped ensure national security through technological innovation.

“Well over half of our economic growth in the last century came from investing in science and technology,” said Raymond Orbach, who headed the Energy Department’s science office under President George W. Bush. Writing in Science magazine in February, Orbach said proposed research spending cuts “would effectively end America’s legendary status as the leader of the worldwide scientific community.”

Orbach, who now heads the Energy Institute at the University of Texas at Austin, said it’s not just a matter of bragging rights – but economic vibrancy and national defense.

“Other countries, such as China and India, are increasing their funding of scientific research because they understand its critical role in spurring technological advances and other innovations. If the United States is to compete in the global economy, it, too, must continue to invest in research programs,” Orbach wrote.

Wisconsin fares poorly in attracting most kinds of federal aid but it does well in winning merit-based federal science grants. About half of the $1.2 billion in R&D grants won by the state’s academic research institutions each year come from the federal government. Slash those grants, and Wisconsin’s ability to create a more competitive economy will be disproportionately harmed.

Reducing the federal deficit is serious business, but cutting the very research that will keep America prosperous and safe is a short-sighted way to go about it.

Tom Still is president of the Wisconsin Technology Council. To learn more about the national SBIR conference, go to www.wisconsinsbir.org.

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